When Pam Donahoo was being recruited last year for a CEO role, the board of directors of her soon-to-be new group had already made a major decision: The association’s headquarters in southern California would relocate to the Dallas-Fort Worth area.

The move made a lot of sense for USFN—America’s Mortgage Banking Attorneys, Donahoo said.

The DFW region is “not only more cost-effective and in the central part of the country, it’s a significant hub for our industry,” she said.

Business is booming in Texas, and so is the population. The state boasts 48 Fortune 500 corporations, behind New York and California. Toyota opened its new North American headquarters in Plano in 2017, north of Dallas. The DFW and Houston metro areas rank fourth and fifth, according to U.S. Census Bureau 2017 population estimates, with 7.4 and 6.9 million people respectively.

Could more associations also consider picking up stakes and moving to Texas?

A CEO Update analysis of its Association Intelligence database found more than three dozen national and international groups, with revenue of at least $1.7 million, headquartered in the Dallas-Fort Worth area. Houston has another 13 groups and Austin has six. That is far fewer than in the largest association hubs of Washington, D.C., and Chicago, but still a significant concentration.

Most of these groups have been in Texas for decades. However, Steven Stout, executive director of the Texas Society of Association Executives, expects to see more newcomers. He knows of two associations, one in the D.C. area and the other in California, and both with more than 100 employees, whose boards are considering moves to DFW.

Mark Rubin, CEO of the Society of Petroleum Engineers, says he can think of associations based in high-cost areas that should move to Texas. The groups would be closer to their members and operate more efficiently, he said.

SPE moved to Dallas in the 1950s, after splitting off from another association, because Dallas was then the center for the oil industry. In the 1980s, SPE moved north of the city to Richardson.

“We’re a global organization. One of the best things about being in Dallas is we have an excellent international airport,” Rubin said. “It’s easy to get to other places around the world.”

About 60 percent of the association’s 84,000 members are outside the United States. SPE, with reported revenue of $79 million, also has offices in Houston, London, Calgary, Dubai, Moscow and Kuala Lumpur. About 100 of SPE’s 270 employees are in the Dallas area.

Rubin also cites the Texas business environment, which favors regulations less burdensome to employers. The cost of living for employees is considerably lower than in some other areas. Texas is one of seven states with no personal income taxes.

And, though the Texas native doesn’t want to imply that other areas are unfriendly, “People really are friendlier in Texas. That actually makes it a little bit easier to hire people who are going to work well with our members.”

A challenge now is the labor market is becoming more active. “We have lost employees to some of the new companies,” Rubin said.

Buying and building

The American College of Emergency Physicians was founded in Lansing, Mich., in 1968 and moved 12 years later to the Dallas area. Needing more space, ACEP built a new 60,000-square-foot headquarters in 2016 on six acres of land one exit from the Dallas-Fort Worth International Airport. Total cost for the land and building: about $15.6 million.

ACEP Executive Director Dean Wilkerson said he’s been told it would have cost twice as much to build new headquarters near Chicago’s O’Hare International Airport, if you could even find six acres to buy.

“There are misperceptions I think about Dallas relative to D.C. and Chicago,” Wilkerson said. “Clearly there are more physician-related organizations, and nursing organizations, in those two areas. If I was recruiting a lot of clinical-type talent, there would be more talent in those areas.”

But like all associations, ACEP has other needs as well, including meetings, membership and technology. ACEP has 38,000 members and reported revenue of $40 million.

“There are organizations all over Dallas that have those kind of people and those talents,” Wilkerson said. He was CEO of Dallas-based Mothers Against Drunk Driving before joining ACEP in 2004.

ACEP now has about 140 employees in Texas, and another 15 in Washington, D.C., handling government affairs and external communications.

One downside: Traffic is bad and getting worse, Wilkerson said. ACEP employees cannot commute by public transit. Wilkerson said he knows people who hope Amazon won’t pick Dallas for its new headquarters for that reason.

SPE’s CEO has a different opinion. Rubin spent eight years at the American Petroleum Institute in Washington, D.C., before joining SPE in 2001. He said his commute is about 20 minutes, far shorter than when he lived in Northern Virginia. He can get from home to the airport in 30 minutes.

The association community is also smaller than in Chicago or Washington, but Dallas Fort Worth Association Executives provides education and networking. DFWAE President Kris Williams is membership director of the Dallas-based International News Media Association.

TSAE, based in the state capital of Austin, is also doing more programming in the DFW area. “As more groups move in, they will find a community already there to support them,” Stout said.

Many leasing price points

Donahoo joined USFN in November after leading American Mensa in Arlington, Texas, for 20 years. The group now has a staff of eight based in Orange, Calif., south of Los Angeles. Donahoo said she decided to lease about 3,000 square feet, a little larger than the current office, just west of DFW International. She estimates overall operating costs will be about 20 percent lower than in California, a big savings for a group with $1.9 million revenue.

Donahoo worked with Executive Vice President Bo Estes of Colliers International to find USFN’s new headquarters. Estes said 2017 was a “blue-ribbon year” for corporate relocations and expansions in the DFW area, though the first quarter of 2018 has softened a bit in comparison. Estes said there are many price points, from a top end as high as $50 per square foot to the low $20s. Colliers research shows an average of $29.40 for class A space in the DFW region for Q1 2018.

By comparison, Cushman & Wakefield research shows Class A average rent in the city of Washington (not including Maryland or Virginia) at $62 per square foot.

“When you are not directly involved in day-to-day advocacy work, it’s just so much easier to be here, in the middle of the country, than in Washington,” Donahoo said.

MAPPING ASSOCIATIONS IN THE DFW AREA

More than three dozen national and international associations are based in the DFW metropolitan region. Popular areas for offices include north of downtown Dallas and to the west, between Dallas and Fort Worth. The map shows the locations of 10 association headquarters.